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Pak exporters unable to finalise orders with European buyers over high price

Over 200 Pakistani companies took part in the four-day Heimtextil Fair, the world’s biggest exhibition of home textile. They had a stall in the state owned Trade Development Authority of Pakistan where the Pakistan exhibitors were well received with an encouraging response from European consumers, however, in many instances, regional players edged out Pakistani companies as they held a cost advantage. They are lost orders to companies from China, Bangladesh, Turkey, Vietnam, India and Egypt.

Besides home textiles such as bed linen and towels, European buyers were interested in textile products used in health facilities. However, on the flip side increase in prices of yarn and cotton which were key staples in textile production, has spiralled up production cost by 15 to 20 per cent making it difficult for the exporters to finalise orders at competitive prices.

Shahab Textile Mills Chief Executive Officer, Sheikh Ali Ahmed Sadiq blamed the government for its “lack of attention” and high production cost of businesses, saying exporters had got dragged down because of these factors. Sadiq a regular participant at Heimtextil feels it is a great platform for interacting and forging links with big textile buyers.

With the business cost staying high, exporters also could not reap the rewards of the rupee’s sharp depreciation against the dollar in December 2017.

A weaker currency gives price advantage to exporters in the international market, but at the same time it makes imports expensive for businesses. Europe, the US, Middle East and Africa were big markets for such textile goods. Canada was a major consumer of healthcare textile products but it had levied 18 per cent duty on exports from Pakistan. On the other hand, Bangladeshi exporters enjoy duty-free status. Some Spanish buyers were willing to offer a 3 to 4 per cent higher price compared to the previous order, but over the past year production cost in Pakistan had gone up in the range of 15 to 20 per cent, he said. Even if they minimise their margins, the goods will still be expensive by around 10 per cent making it difficult for them to get orders, he said while pointing out that new buyers from Spain, Poland and Albania had also expressed interest in Pakistan’s home textiles.